President Obama took a bold and important step this week, standing up for student consumers by making a recess appointment of former Ohio Attorney General Richard Cordray to head the new Consumer Financial Protection Bureau (CFPB). The president's action means that the CFPB now has all its powers to protect students from unfair financial practices that pile on student debt, including lenders offering dangerously expensive private student loans and aggressive credit and debit card marketing.
Every year, students graduate owing tens of thousands of dollars before they've even earned their first paycheck. The average student now graduates with over $25,000 in debt -- while student loan debt nationally has surpassed all credit card debt, reaching a whopping $1 trillion.
Even worse, hundreds of thousands of students also assume expensive private student loans before exhausting more consumer-friendly college financing options. Private student loans pile more debt on students because they provide the worst rates and terms to students with the greatest financial need. In addition, students are targets for high interest, high-fee credit cards and debit cards on campus.
The CFPB is a new kind of regulator designed to do one job and do it well -- protect Americans from toxic financial products. However, since July 21, the CFPB has been up and running, but only with partial powers. Now, with a director in place, the CFPB has additional abilities that kick in -- including the right to regulate private student lenders like Sallie Mae.
An agency to protect students from toxic financial products sounds like it should be a no-brainer with bipartisan support -- and it is. Recently, 37 state Attorneys General, on a bi-partisan basis, had sent a letter to the Senate urging confirmation of Rich Cordray.
Yet, at the behest of both the Wall Street banks, some Senators had opposed confirmation of any CFPB director. In May, 45 Senators had written the president and told him that they would block confirmation of any director until and unless the CFPB's independence and authority were first restricted. They want the CFPB weak and powerless and with a tin cup in hand. Then, on Dec. 8, 45 Senators blocked Cordray's nomination. (Final vote: 53 Aye -- 45 Nay, but 60 Ayes needed to invoke cloture (aka defeat a filibuster)).
Fortunately, President Obama has acted to protect students and rejected these outrageous demands to weaken the bureau. The president did his job with the recess appointment of Richard Cordray to direct the CFPB. Now, the CFPB can do its job, protecting students from unfair financial practices.
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Joe Lapointe: Obama Holds a Whip Hand Over Republicans on Recess Appointments
All of these loans were entered into WILLINGLY to the benefit of the borrow and the lender. Some borrowers make bad decisions with their choice of major, length of time to graduate, and general school performance (i.e. grades). It is not the lenders fault that students who borrow don't get jobs, and they should not suffer the consequence.
Secondly these "hair cuts" you refer to are investments held by retirement funds who are already underwater. Do you want to bail out the retirement funds too? Where in the hell do you think this money comes from. Wake up!!
Who said anything about not paying loans back? This has nothing to do with that and everything to do with unfair loaning practices and changing rules as they go along.
Once again proof that too little information but loud opinion makes for folly...
1) Fraud is already illegal in all 50 states. If banks are fraudulently inducing students to enter into loans they can currently be prosecuted by any of the state AG and the justice department.
2) If on the other hand banks are acting honestly but students are too ignorant to appreciate what they are committing to, then any state is free to increase the age a person can sign a binding contract.
3) The fact that the average student graduates with $25,000 of debt is irrelevant as far as the CFPB is concerned. If they entered into these debts knowingly and of their free will then they should start paying back the loans and the CFPB would be superfluous. If they were fraudulently induced to take the loans there are plenty of mechanisms on the books to deal with this.
It will never happen of course - but if someone is dumb enough to rack up $80k+ for a B.S. they will believe it, and that is what Obama is counting on.......
GOP sold us citizens off to the highest bidder. Of course they're bothered by the recess appointment: they can't deliver as promised. Yea!!!
Oh, and if the GOP start their rant about recess appointments: Baby and Papa Bush had twice the number of recess appointments compared to President Obama, and Reagan had three times per year.
Let's get this agency rocking and rolling! Interest rates on credit cards should be limited to less than 15%.
My daughter has four different student loans, and I'm paying them all for her.
She's a single Mom, dealing with a monster of an ex, so she isn't able to handle those four extra bills.
She's fighting hard enough just to get food stamps and medical aid for her son. She's tried to get them deferred, but they immediately come after us for the payments. Since my husband is a military officer, we don't want to ignore them and get him in trouble.
Paying those loans was no problem when I was teaching, but now I'm disabled and can't work. four different payments is a pain. I wish that they would have a program where a parent could consolidate those loans and pay one reasonable payment!
if you wanna stay in business or have regs go your way, better contribute $ to the DNC or else get a "visit" from richie
Stay in the real world. You idolize the 1% hoping they will throw you a few measly crumbs. They won't, but you just keep dreaming away . . .
WHEREAS YOU are so petty and jealous of them that you want to force them to hand over their crumbs
that makes you a bum
Also, had the Bush administation not bailed out the banks, the run on those institutions would have overwhelmed the ability of FDIC insurance to cover the losses.
You might consider reviewing the history of bank panics in the century prior to the bank regulation that began in the 30s
All countris have industrial policies that promote a variety of industries, generally in the form of tax incentives and the development of government funded physical and social infrastructure. Do you think our national security would have been better served if banks, GM and Chrysler were aloud to go out of business, rather than be provided with loans (Largely paid back at this point) ?
By the government making these institutions whole it has exposed the US to tremendous financial liability. Granted GM, Chrysler and the most of the banks have largely paid back the capital that is not the risk. What is the risk is the loans the the FED took off their balance sheets and put on the tax payer. The Fannie/Freddie balance sheet loans are literally $3 TRILLION or more. As a nation we can't maintain the level of financial leveraging that we maintain. We will be Greece with a 150 basis point move.
http://theulstermanreport.com/2012/01/05/hey-obama-you-just-broke-your-own-law/
If Barack Obama allows Richard Cordray to begin exercising his authority as the new Director of the Consumer Financial Protection Bureau with only the recess appointment (which was itself an illegal act by the president) – the President Obama is in clear violation of the very law he himself signed as president. If Obama refuses to acknowledge Sec 1066 of the bill – he is not only ignoring Congress, but he is ignoring the stipulations inextricably linked to his own Executive Office when he signed that bill as president!
To the supporters of Barack Obama, a man who was elected, among other things, on the oft-repeated promise of “open and accountable government”, I would simply ask that you judge this president by his repeated actions. Barack Obama sidesteps the law every time the occasion to do so presents itself. He has openly stated he intends to govern “without Congress” a clear and dangerous violation of the foundational principles on which this American government was founded upon.
Here's a good overview of what's really going on.
http://thebottom99percent.com/heres-why-the-gop-is-ranting-over-the-new-consumer-agency